USDCAD plunged to a 1.33 handle after The Bank of Canada indicated it is looking at the possibility of raising interest rates as the nation’s economic recovery picks up steam.
Bloomberg reports that in a speech she’s delivering in Winnipeg, Manitoba, Senior Deputy Governor Carolyn Wilkins highlighted how the nation’s recovery is broadening across regions and sectors, giving policy makers “reason to be encouraged.”
“As growth continues and, ideally, broadens further, Governing Council will be assessing whether all of the considerable monetary policy stimulus presently in place is still required,” Wilkins said in the text of a speech she’s giving Monday.
“At present, there is significant monetary policy stimulus in the system.”
Which prompted the Loonie to rally near 2-month highs…
Some key excerpts from her speech…
“ If you saw a stop light ahead, you would begin letting up on the gas to slow down smoothly. You do not want to have to slam on the brakes at the last second. Monetary policy must also anticipate the road ahead.”
“An important aspect of our inflation assessment is that the economic drag from lower oil prices is now largely behind us.”
“The adjustment to lower oil prices is now largely behind us, and we are looking for signs that the sources of growth are broadening across sectors and regions,” Wilkins said. “The signs are encouraging.”
We wonder how long before another BoC member comes out and says the exact opposite?